Lawsuit Claims LEED Certification Is False and Misleading

The green-building community has been rattled by a mid-October lawsuit filed in a New York federal court alleging that the U.S. Green Building Council (USGBC) “intended to mislead the consumer and monopolize the market for energy-efficient building design” by falsely claiming that it verifies energy-efficient design and construction through its Leadership in Energy & Environmental Design (LEED) rating system. The class-action suit — filed on behalf of “consumers, taxpayers, [and] building design and construction professionals” by New York mechanical-systems designer Henry Gifford — seeks $100 million to compensate victims, plus legal fees. Although the case concerns commercial development such as office buildings, it raises the possibility that similar lawsuits could target green rating systems for residential construction.

Points for design The LEED system, established in 2000, is a third-party certification program designed to rate the “greenness” of qualifying buildings by awarding points for such design features as energy savings, water efficiency, indoor air quality, and reductions in CO2 emissions. Depending on the number of points it earns, a building may be awarded one of four levels of certification, from “Certified” through “Silver” and “Gold” to the highest level, “Platinum.”

From its inception, the program has been criticized for focusing on a building’s design rather than its performance. A recent change requires building owners to report annual performance data — but there’s no way to repeal certification if a building falls short of its targets. Detractors say that the system is essentially a marketing tool that allows owners to charge premium rents to image-conscious tenants.

It’s not about energy. Gifford has clashed with the green-building establishment before. In early 2008, the USGBC claimed that LEED-certified buildings were 25 to 30 percent more energy-efficient than other commercial buildings, based on a study it had commissioned from the New Buildings Institute (NBI), a nonprofit organization in Washington state. A short time later, Gifford published his own analysis of the data used in the NBI report; in it, he pointed out some statistically unsupportable conclusions on the part of the USGBC. While admitting to some problems with its methodology, the organization continues to dispute Gifford’s own conclusion — that LEED-certified buildings are actually 29 percent less energy efficient than comparable structures.

Gifford’s lawsuit takes his earlier argument a step further. In essence, its claim is this: that while the USGBC is nominally in the business of evaluating the squishy concept of “sustainability,” it has knowingly misled the public into believing that LEED-certified buildings are necessarily energy-efficient, when that is not the case. “What Henry is saying is that instead of hiring experts like him to improve building performance, building owners are just hiring a LEED consultant to do the paperwork to collect points for certification,” says Stephen Del Percio, publisher of the Green Real Estate Law Journal. “Therefore, he’s been damaged, along with others like him.”

A long way to go. Legal experts are divided on the suit’s prospects. “This is really exciting from a dorky legal perspective,” says Del Percio, “but it’s only the beginning of a long process.” Del Percio further observes that even though the suit appears to be a setback for the USGBC, it could ultimately work to its benefit. “They can say, ‘Look, there were some problems in the past, but now we’re better.’ That may not help defend the lawsuit, but it could help them in terms of public awareness and raise their profile.”